Merrill Lynch chart shows how much investors have pulled out of growth stocks and plowed into value

Some of us here at The Tell like to think ourselves as connoisseurs of 1980s British pop — or maybe we’re just really old. Either way, we’re pretty sure Style Rotation would be a great name for a Paul Weller cover band. After all, what does the abrupt selloff in formerly high-flying biotech and social-media stocks in favor of more value-oriented shares speak to if not investors’ ever-changing moods?

Fortunately, strategists at Bank of America Merrill Lynch are more focused on crunching the numbers behind the phenomenon. They note there has indeed been a significant shift over the past five weeks. As the above chart shows, they found investors have pulled $8.9 billion out of U.S. growth funds over that period. At the same time, around $3.8 billion have flowed into funds that fit in the value box.

Correspondingly, when it comes to sector rotation, investors have been favoring energy over health care, the flows showed.

Breaking down the most recent flows data, B.of A. Merrill found found $2.9 billion flowed into equity funds in the latest week, marking the fourth consecutive week of inflows, while bonds saw the seventh straight week of inflows, with $3.3 billion. Cash, meanwhile, saw the first inflow in six weeks, pulling in $15 billion; year-to-date outflows stand at $103 billion, the analysts noted.

Within equities, emerging markets saw a tiny inflow of $400 million, while Europe clocked its 43rd straight week of inflows at $1.2 billion. Japan saw inflows of $300 million, while the U.S. saw a $500 million outflow.

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